Online fashion retailer Boohoo.Com PLC (LON:BOO) (BOO.L) has released news today of the appointment of a new CEO.
John Lyttle will take over as CEO on 15 March 2019. He currently works as the Chief Operating Officer of Primark. During his eight-year tenure at the company, turnover has grown by 158% to over £7 billion, while operating profit has increased by 116% to £735 million.
Alongside the appointment of a new CEO, the company is also making changes to its main Board roles. They are designed to support the company’s next stage of growth and its international expansion.
Current Joint Chief Executive, Mahmud Kamani, will become Group Executive Chairman of the company with effect from 15 March 2019. He will focus on the long-term strategic direction of the business.
Current Joint Chief Executive, Carol Kane, will assume the title of Group Co-Founder and Executive Director with effect from 15 March 2019. She will lead the company’s vision in terms of creativity and its multi-brand strategy. Current non-executive Chairman, Peter Williams, will step down from his role with effect from 15 March 2019.
In my view, management changes could cause a degree of uncertainty for Boohoo in the near term. The business has been very successful under its current management team over a long time period, and change can cause investors to become more cautious about the long-term prospects for the business.
That said, the new CEO has a strong track record and may be able to deliver improving financial performance for the business over the long run. Since the current Joint-CEOs will still be heavily involved in the company’s strategy, the new Board may prove to be a positive catalyst on the company’s stock price over the coming years.
The Boohoo share price appears to offer relatively good value for money at the moment in my view. Its PEG ratio of 1.7 suggests that it could deliver capital growth, with its sales and EPS prospects seemingly positive due to its focus on customer service, innovation and value for money. As a result, I’m optimistic about its long-term share price growth potential.